Customs seizes record volume of smuggled gold in Jan-Mar period

A record quantity of 225 kilogrammes (kgs) of gold, smuggled into the country in the form of bars, were seized in the first three months of the current calendar year. The quantity is equivalent to near about 50 per cent of that of the year 2013, according to the customs estimate.
Sources said despite seizure of substantial quantity of gold, smugglers are, surprisingly, continuing their efforts to bring in gold into the country through illegal channels.
The extent of gold smuggling and the 'informal trade' accompanying it have been on the rise in the country, primarily due to the absence of a gold import policy, officials and people familiar with business in the precious metal said.
According to them, despite frequent appeals from the local jewellers, the government has, until now, failed to formulate any gold policy.
In the absence of an appropriate gold policy, a significant quantity of the much-sought-after metal enters the country every year informally, depriving the government of a handsome amount of revenue, they mentioned.
However, sources said, the surge in gold smuggling in recent months is very much linked to the hike in import duty on the precious metal in neighbouring India, the largest consumer of gold in the world.
In the last three months of the current calendar year 2014 (January-March), a record 225 kilogrammes (kg) of gold bars were seized at Hazrat Shahjalal International Airport (HSIA) in Dhaka, Shah Amanat International Airport (SAIA) in Chittagong and Osmani International Airport in Sylhet, according to the Customs Intelligence and Investigation Director.
In 2013, the customs intelligence personnel seized some 520 kg of gold as against 25 kg in 2012.
An official at the customs intelligence department told the FE that large volume of gold was coming into the country through illegal channels, but the government had not been getting import duties on it due to the absence of a gold import policy.
He said owing to the lack of a gold import policy, Bangladesh was being used as a transit route for gold smuggling, especially to India, which has crossed all previous records in the recent times.
The country's jewellery industry also depends to a great extent on smuggled gold as there is no proper gold policy, he added.
"In 1996, the Bangladesh Jewellers Association (BJA) made a proposal to the government urging it to frame a policy for the gold industry, but the plea is still confined to mere papers," general secretary of BJA Dewan Aminul Islam Shahin told the FE.
He said on several occasions their organisation had urged the government to formulate a gold import policy, but until now it has not materialised.
When contacted, an additional secretary of the commerce ministry told the FE that the government had not yet been able to reach a consensus on an appropriate gold policy.
According to BJA, currently the country has more than 10,500 jewellers' shops including around 1,150 shops in Dhaka city. The average turnover is Tk 650 million per day, it said.
MA Wadud Khan, former president of BJA told the FE that the country's jewellery sector was dependent on migrant workers and travellers because the manufacturers cannot purchase gold through proper channel.
He said several times the government had assured them of framing a gold policy, but political and bureaucratic tangles have apparently stood in its way.
He said due to the lack of a policy, the entrepreneurs could not import gold through proper channel and this had been forcing the sector to depend either on smuggled gold or that imported under 'baggage rules'.
Anwar Hossain, president of Bangladesh Jewellery Manufacturers and Exporters Association (BJMEA), said ten years ago the gold manufacturers had placed a demand to the commerce ministry for framing a gold policy and keeping the market stable by releasing pure gold from Bangladesh Bank.
He said, "Bangladesh government could not formulate a national gold policy in forty-two years. Political interference in favour of the smugglers and bureaucratic knots are two major causes behind the failure."